Press Releases

MTM Announces Financial Results for 2nd Fiscal Quarter of 2009 for the Period Ended Sept. 30, 2008

STAMFORD, Conn.--(BUSINESS WIRE)--MTM Technologies, Inc., a leading national provider of innovative IT solutions and services to Global 2000 and mid-size companies, today announced financial results for its second fiscal quarter ended September 30, 2008.

Key Highlights for Second Quarter of Fiscal Year 2009

Return to positive EBITDA;
Net revenue increased 4.2% over the prior quarter;
Selling, General & Administrative expenses, net of depreciation, amortization and stock-based compensation costs, decreased $648,000 over the prior quarter.

Second Quarter Fiscal Year 2009 Results

Net revenue was $50.1 million for the quarter ended September 30, 2008, representing an increase of 4.2% over the prior quarter and a decline of 19.6% over the comparable prior year period. Within total revenue, product revenue was $35.9 million or 72% of total revenue. Product revenue was up 5.9% as compared to the previous quarter and down 19.1% over the comparable prior year period. For the quarter, services revenue was $14.1 million, representing 28% of total revenue. Services revenue was essentially flat as compared to the previous quarter and down 21% on a year-over-year basis.

Gross profit was $11.2 million for the second quarter of fiscal 2009, resulting in an overall gross margin of 22.4%. Gross margins decreased 1.6% from the previous quarter and essentially flat as compared to the comparable prior year period. Product gross margin for the second quarter of fiscal 2009 was 16.4%, relatively flat as compared to the previous quarter and an increase from 15.3% in the prior year’s quarter. Services gross margin was 37.5% in the second quarter of fiscal 2009, which was down from 42.1% in the previous quarter and down from 40.6% as compared to the prior year’s quarter.

Selling, general and administrative expenses, excluding depreciation, amortization and stock-based compensation costs, were $11.1 million a decrease of approximately $648,000 over the prior quarter and a decrease of $1.8 million as compared to the same quarter in the prior year.

EBITDA for the second fiscal quarter ended September 30, 2008 was $52,000 as compared to a negative $248,000 in the previous quarter and $1,107,000 in the second quarter of fiscal 2008.

Net loss available to common shareholders was $5.7 million, which includes $5.2 million of non-cash items related to depreciation, amortization, stock-based compensation, taxes, interest and preferred stock dividends, or $6.33 loss per share on a split adjusted basis, for the quarter ended September 30, 2008, compared to a loss of $4.7 million, or $5.37 loss per share on a split adjusted basis, in the same quarter a year ago. Earnings per share take into account the one for fifteen reverse stock split that was completed on June 25, 2008.

Lenders

MTM also announced that Columbia Partners LLC, MTM’s existing secured debt facility lender, and GE CDF, MTM’s credit facility lender, modified their agreements to ease certain financial covenants.

Financial Outlook

Given the uncertainties in the overall economy, MTM is withdrawing any previous financial guidance and is suspending future guidance.

Steve Stringer, President and Chief Executive Officer, said “Our second quarter results are a reflection of the recent dramatic changes to the U.S. economy. While we are pleased to return to EBITDA profitability, our goal was to produce a greater EBITDA improvement, and consequently, we will continue to reduce our expense structure.”

Inquiries concerning this earnings press release and subsequent financial information can be made by contacting MTM at http://mtm.com

MTM and MTM Technologies are trademarks of MTM Technologies, Inc. All other company and trademark names are the property of their respective owners.

Non-GAAP Financial Measures

MTM Technologies believes that EBITDA, which is not a recognized measure for financial presentation under United States generally accepted accounting principles (“GAAP”), provides investors and management with a useful supplemental measure of its operating performance because it more closely approximates the cash generating ability of the Company as compared to operating income (loss). EBITDA excludes the impact of interest, taxes, depreciation, amortization, stock based compensation and other expense. A table reconciling net loss calculated in accordance with GAAP to EBITDA is included in the financial statements in this release. EBITDA does not have any standardized definition and is therefore unlikely to be comparable to similar measures presented by other reporting companies.

About MTM Technologies, Inc.

MTM Technologies, Inc. is a leading national provider of innovative IT solutions and services to Global 2000 and mid-size companies. Partnered nationally with industry-leading technology providers such as Cisco Systems, Citrix, EMC, HP, and Microsoft, MTM Technologies offers comprehensive solutions in the areas of secure access, unified communications, consolidation, and virtualization. In addition, MTM Technologies provides a broad range of complementary managed service offerings, including system monitoring and management, security management, IP telephony management, and IT helpdesk support. The lifecycle approach also includes IT architecture consulting, IT staff augmentation and training services. For more information, visit http://mtm.com.

“Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995

Except for the historical information herein, the matters discussed in this release include forward-looking statements. In particular, the forward-looking statements contained in this release include statements about future financial and operating results. When used in this press release, the words: believes, intends, plans, anticipates, expects, estimates, and similar expressions are intended to identify forward-looking statements. Such forward-looking statements are subject to a number of risks, assumptions and uncertainties that could cause actual results to differ materially which include, but are not limited to, the following: a significant portion of the company’s quarterly sales are concluded in the last month of the fiscal quarter; the Company’s key strategic relationships; the length of sales and delivery cycles; the risk of obtaining financing and complying with our lenders’ financial covenants; the timing, cost and success or failure of current and new product and service introductions; and other risks affecting MTM’s businesses generally and as set forth in MTM’s most recent filings with the Securities and Exchange Commission. All forward-looking statements in this release are qualified by these cautionary statements and are made only as of the date of this release. MTM is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements whether as a result of new information, future events or otherwise.